Digital remittance revolution is changing lives

Digital remittance refers to the transfer of money by foreign migrants in their native countries using digital transfer networks such as easy-to-use mobile applications, digital wallets, and others. The market witnesses the entry of digital remittance operators, posing a serious challenge to traditional cash-in-hand providers due to less transfer fees and ease of usability. Numerous benefits of digital remittances have shifted consumers’ focus toward digital transactions for money remittance. However, the outbreak of Covid-19 paralysed the economy of most countries’ economies during the initial phase. Thereby negatively impacting the global remittance market. A fall in remittance flows also imposed economic, fiscal, and social burdens worldwide. 

The Consumption Segment to Dominate By 2030

The consumption segment accounts for nearly three-fifths of the global remittance market share in 2020, and it is predicted to rule the roost by 2030. The workers remit a lump sum of hard money to their home country every month. As a result, it drives the growth of the segment. However, the investment segment would cite the fastest CAGR of 8.1% throughout the forecast period. It enables developing nations to regenerate new revenue streams by investing the remitted money in different investment schemes, boosting their GDP.

Presences of digital remittance 

The rise in cross-border transactions and mobile-based payment channels came with good news in the market. It minimised the cost & transfer time, and growth in the adoption of banking & financial services drove the market’s growth. Unfortunately, a lack of awareness and slowdown of the remittance industry in Asia-Pacific hampers the market growth. Conversely, continuous technological innovations in the digital remittance industry and the rise in internet and mobile penetration in this region are expected to present significant opportunities for market expansion shortly. The Asia-Pacific digital remittance market is segmented on remittance type, remittance channel, end-user, and country. The market is based on remittance type on bifurcated into inward and outward digital remittance 

Evolution means countries like India and Nigeria, the UK’s most prominent remittance destinations, can take advantage of digital services. According to the statistics, it revealed that five years ago, the smartphone penetration of India was just 22%. By 2021, the penetration took a halt at 60 percent, and it was estimated 80 percent penetration in the coming five years. Likewise, in Nigeria, it is evaluated that smartphone users will hit over 140 million by 2025. The spread of sophisticated hardware benefits individuals and broader economies in online remittances with promising opportunities. 

Fintech Comes To Rescue 

Fintech has addressed the exclusion, blending the digital solutions with the traditional to offer services to people without access to the internet. Many firms are now offering services like ATL Money Transfer to transfer money in a secure way, digital manner to be picked up by the recipient in cash and a blessing in those countries with low internet access. Economists stated that the global growth of digital remittances plays a vital role in growing access to capital and opportunity. Unfortunately, there is a significant gap between those with access to end-to-end digital services in terms of cash. However, the fact that the online money transfer market is thriving means the adoption of cheaper and widely spread tech like tablets and smartphones, which are becoming a useful tool to more people. In short, the digital remittance explosion is part of a revolution that has the power to transform millions of lives for the better.

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